Bullish Tanker Market Outlook Sees d'Amico Order 2 Newbuild ECO LR1's in $88 Million Deal

d'Amico's two newbuild 75,000 DWT capacity LR 1 product tankers will come at a cost of $44 million each.

d'Amico International Shipping S.A. (DIS) says that following its bullish outlook for the tanker market, its subsidiary, d'Amico Tankers Limited – Ireland, has finalised a deal with Hyundai Mipo Dockyard Co. Ltd. – Korea for two newbuild 75,000 DWT capacity "ECO design" long range (LR1) product tankers.

DIS says the vessels will have "the highest fuel efficiency," and an Energy Design Index (EEDI) well within the International Maritime Organization's (IMO's) requirements for vessels built before December 31, 2024.

At a price of $44 million each, the two vessels will be constructed by Hyundai Vinashin Shipyard Co. Ltd – Vietnam, with one vessel expected for delivery in Q2 2018 and the second in Q3 2018.

"I am very satisfied to announce the exercise of our options to build two further LR1 vessels, in addition to the four units already ordered in April and June," said Marco Fiori, CEO of DIS.

"We reiterate our firm believe in the positive fundamentals of the product tanker industry, which has been giving us further satisfactions even throughout the third quarter of the year, usually a weak season for our market.

"Also, I think it is important for DIS to strengthen its presence in the LR1s, which I am sure will prove to be a very rewarding segment within our industry, thanks on the one hand to a very low orderbook and on the other hand to the expansion of the tonne/mile demand, following the concentration of the world refining capacity in the U.S. and in the Middle and Far East, away from some of the main consuming regions of the world.

"In this context, I believe LR1s, with their larger cargo capacity, will be in great demand in the years to come, thanks to their ability to carry larger quantities on the same distances," added Fiori.

Last year, DIS said it was betting on strong demand for fuel-saving vessels, despite losses that widened to $6.8 million in the first quarter of 2014.